Indian Oil Corporation (IOC) has proposed to import 5-6 million tonne per annum (mtpa) of crude oil from Azerbaijan. An offer in this regard was made by IOC to the State Oil Company of the Azerbaijan (Socar) on Thursday.
Minister of industry and energy, Azerbaijan, Majid Karimov told FE that he would actively consider Indias request to purchase 5-6 mtpa (around 140,000-150,000 barrels a day) of crude oil from Baku. We understand Indias requirement and we shall actively consider its request. I may visit India soon on the invitation Of Mr Aiyar, he added.
With the commissioning of the worlds biggest pipeline project, the $4 billion Baku-Tiblisi-Ceyhan (BTC) pipeline project, crude oil can be pumped from the Caspian region (Baku in this case) to the Mediterranean sea (at the port of Ashquelon).
This pipeline has a capacity of carrying one million barrels of oil per day (50mtpa) and is expected to be fully operational by the end of this calendar year.
From the Ashquelon port, crude can be transported through the Eilat-Ashquelon pipeline which links the Red Sea port of Eilat with the Mediterranean port of Ashquelon. This being a reversible pipeline can carry crude from Ashquelon to Eilat from where the very large crude carriers can pick up crude oil for transporting to India.
Oil supplies to India from Azerbaijan will be from the ACG oil project through the BTC pipeline. The ACG oil field produces 2.27,000 barrels per day (during 2005) and has two producing platforms-Chirag (140,000 bpd) and Central Azeri (150,000 bpd).
While Chirag has reached its full production capacity, Azeri is three times bigger than Chirag and production will soon touch 50,000 bpd from the ACG project. In 2008, production from the ACG project will touch its peak at one million barrels of oil per day.
Mr Aiyar said, Indian and Azerbaijan have also agreed to form a joint working group (JWG) on hydrocarbons co-operation between the two sides. I have given an 11-point programme for co-operation in various areas of oil and gas, he said.
Besides purchasing crude, IOC has also expressed interest in modernising the two refineries in Azerbaijan (capacity of 6-8 mtpa each), operating at a capacity of 40%.
Even Socar has been invited to make investments in undertaking refinery projects in India, both grassroot as well as expansion related. GAIL plans to get involved in gas E&P in Caspian and as transporting gas will be difficult, it can get equivalent crude oil for its share of equity gas.
A detailed action plan on all these issues will be prepared by the JWG, which is expected to have its first meeting in Delhi.